Average Property Tax Bill

For more information, please call 734/394-5130.
How property tax calculations work

In these very challenging economic times, we're all concerned with our property taxes and wonder, "why are my property taxes going up, while my property values are going down?"

Below are two illustrations that explain the effect that Proposal A has on your property tax calculation.

Example 1 - New(er) home owner:
In 2007, you purchased a home for $300,000 (true cash value) with "Assessed and State Equalized Value" both at $150,000 (1/2 the sale price of your new home), and a "Taxable Value" of $110,000.

A study of similar sales in your neighborhood shows the "True Cash Value" of the property has increased to $310,000 for 2008.

Your property taxes will be calculated on the following basis:

For 2008:

Assessed/SEV Value (1/2 the Market Value of your new home)- $155,000
Capped Value (this value is "uncapped" at the time of sale) - $155,000
Taxable Value (your new "capped" value) - $155,000
Your Taxable Value is uncapped the year following the transfer of ownership (sale) of a property; therefore, the "Taxable Value" equals the "Assessed Value."

In subsequent years, your "Assessed Value" will change based on a study of similar sales in your neighborhood and be adjusted accordingly. Your "Taxable Value" - that upon which you'll be "Taxed," will increase by the rate of inflation (CPI) or 5% whichever is less.

If your Assessed/SEV value is determined to have dropped below your "Capped Value," your "Taxable Value" will also be reduced.

Example 2 - Property values decreased:
In 2007, your home was valued at $300,000 (true cash value) with "Assessed and State Equalized Value" (SEV) both at $150,000, and a "Taxable Value" of $110,000.

A study of similar sales in your neighborhood shows the "True Cash Value" of the property has decreased to $290,000 for 2008.

For 2008:

Assessed/SEV Value is (1/2 the "adjusted" true cash value) - $145,000
Capped Value (prior year's value still below the SEV for this year) - $112,530
Taxable Value (lesser of the assessed or capped value) is - $112,530
Your "Taxable Value" is still below your "Assessed/SEV Value" therefore, you are still subject to an increase in your "Taxable Value" based on the rate of inflation or 5% whichever is less.

When your "Assessed/SEV Value" collides or is equal with your "Taxable Value," you will see a reduction in your property tax assessment - a lower tax bill!

While there's still a difference between these two figures, your Taxable Value will continue to increase, even though your "Assessments" are decreasing.